The banking giant, facing scrutiny after the US Federal Reserve rejected its plan for returning capital to shareholders, said net income for the first quarter was $3.9 billion, up 3.5% from the year-ago figure of $3.8 billion.

Results were also dragged down by 12% dip in markets and securities services revenue.

But Citi again benefited from improving credit quality. The company's net credit losses were $2.4 billion, down from $2.9 billion.

It also shaved expenses from $12.3 billion to $12.1 billion. Total staff is down to 248,000 from 257,000 a year ago.

Finally, total loans notched up 3.6% to $664.2 billion.

Citi has been under pressure since it disclosed in late February that it trimmed earnings by $235 million from the fourth quarter of 2013 due to fraud in Mexico.

Then, in March, the Fed barred Citi from moving ahead with higher shareholder distributions after finding weakness in the bank's capital foundation.

"Despite a quarter that was difficult for our company, we delivered strong results," said chief executive Michael Corbat.

"Very cognizant of our shareholders' desire to see a sustainable return of capital, we are engaged with the Fed to better understand their expectations," Corbat said.

"We are committed to bringing our capital planning process to the highest possible standards, befitting an institution of our global reach. I will dedicate whatever resources and make whatever changes necessary to achieve this critical goal."

Citi's results translated into earnings per share of $1.23 when special items are excluded. The company had been forecast by Wall Street analysts to earn $1.14 per share.